How Do I Purchase Stock in a Company?

Company stocks are generally traded on a stock market.

Company stocks are generally traded on a stock market.

Stock investments offer a way to purchase part of a public company. These shares can allow you to reap the rewards of corporate profits and the increasing value of a strong company, or you could lose money if the demand for shares in the company decline. Stock in a company can be purchased as an individual investment, or as part of a comprehensive portfolio investment strategy. If you are an employee of the company, or already own stock, consider researching special stock purchase methods that may be available to you.

Review the stock purchase methods for the company stock you want to purchase. You will generally purchase shares of stock in a company by using a brokerage account that buys stocks offered for sale on a stock exchange such as the New York Stock Exchange. Companies may also offer stock purchase plans for employees, existing bondholders or through a dividend reinvestment program.

Calculate the amount of money you want to invest in the company stock. The number of stocks you can purchase varies based on the current market price of the stock. Stock values are generally based on the number of shares outstanding, the general value of the company and current economic conditions.

Establish a brokerage account. You can opt for a do-it-yourself option through an online broker, or you can look for a full-service broker that offers stock portfolio management, other financial services products and investment advice. Online brokers generally offer a lower-cost option if you are comfortable with your investment knowledge and do not want to pay for additional services.

Fund your brokerage account. Transfer funds from your bank account to your brokerage account. You may be offered an option to directly fund your account when you initially sign up for the service. Ensure you place sufficient funds in your account to cover the company stock purchase and any stock purchase fees.

Determine your target price. Monitor the stock price. Prices on every stock fluctuate on a daily, monthly and even yearly basis. Track the stock price to determine your personal target price for the stock purchase. Consider historical values, recent company activities and the company’s growth potential.

Place a purchase order through your broker for the company’s stock. You can designate whether you want to purchase the stock at the current market price, or if you want to purchase the stock when it reaches the price you designate. If you opt to designate a purchase price, your company stock order will be held until the market price matches your price point.

Review your company stock purchase. After you purchase the stock, review the order and proof of ownership to ensure that the purchase was made correctly for the number and value of stocks you requested.

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